Luoyang Luanchuan Molybdenum Group Co., Ltd. (603993)

Equity Research Report　|　Industry: Non-ferrous Metals Mining and Trading　|　Report Date: 2026-10-02　|　Market data through the 2026-09-30 close

This report was automatically compiled by AI based on publicly available information and is for reference only. It does not constitute investment advice.

Core Conclusion: Mining profitability is driving accelerating earnings; low PE coexists with high PB and PS, making delivery on growth key to valuation

Market data through the 2026-09-30 close

1. Key Investment Points

• Accelerating earnings, with profit growth outpacing revenue growth: In 1H 2026, revenue was RMB 135.320 billion, up 42.78% YoY; net profit attributable to shareholders of the parent was RMB 16.152 billion, up 86.27%; adjusted net profit grew 78.89%.
• Mining is the core driver of growth and margins: In 2025, revenue from the mining segment rose 19.08%, with a gross margin of 52.85%; trading revenue fell 4.39%, with a gross margin of only 6.44%. The business mix and metal prices will affect earnings sensitivity.
• PE is near a historical low, while PB and PS are elevated: At the September 30 close of RMB 16.88, PE-TTM was 12.98x and PB-MRQ was 4.03x; PE was at the 16th percentile over the past 5.2 years, while PB was at the 80th percentile.

Market Expectations and Evidence

• What the market is pricing in: Valuation implies average annual EPS growth of approximately 6.5%, below institutional expectations for net profit growth of 61.46% in 2026 and 13.38% in 2027. The former is a long-term assumption and should not be equated with a single-year forecast.
• What the evidence shows: In 1H, growth in both net profit attributable to shareholders of the parent and adjusted net profit significantly outpaced revenue growth, indicating stronger earnings delivery than required by the long-term implied growth rate. However, institutional forecasts show growth slowing to 13.38% in 2027, and the sustainability of high growth remains to be verified.

Evidence-Weighted View: Bullish; Confidence: High (covered by 21 institutions; market and financial-report figures cross-checked programmatically)

Profit growth accelerated significantly in 1H, and PE is near a historical low. However, PB and PS percentiles are elevated, while institutional forecasts point to slower subsequent growth.

2. Business and Competitive Strengths

2.1 Business Mix

The company mines and sells copper, cobalt, molybdenum, tungsten, niobium, phosphorus and other mineral products, and conducts mineral trading through IXM. Revenue comes from mine sales and trading spreads.

2.2 Competitive Advantages

Competitive Advantage Strength: Moderate

• Resources and scale: In 2025, the company produced 741,100 tonnes of copper and 117,500 tonnes of cobalt, with operations spanning copper and cobalt, molybdenum and tungsten, and niobium and phosphorus.
• Cost control: 93.90% of raw materials used in mining came from the company’s own mines, while external purchases accounted for 6.10%.
• Comprehensive recovery: The company has disclosed that it can recover associated minerals such as scheelite, copper, iron, fluorite and rhenium from molybdenum tailings.

Key threats: Metal price cycle volatility, country and operating risks in the Democratic Republic of the Congo (DRC), low trading margins and working-capital fluctuations, and risks in executing capacity expansions.

2.3 Value Chain Position and Profitability Trends

• Mining inputs include energy, fuel, equipment spare parts, explosives and beneficiation materials; 93.90% of ore raw materials came from the company’s own mines.
• In 2025, purchases from the top five suppliers accounted for 10.31% of total annual purchases; inputs outside mining, such as energy and equipment, remain exposed to external price movements.
• Mining products are sold to smelters, processors and metal trading channels; trading products serve customers across the global industrial value chain.
• Metal selling prices are mainly affected by international benchmark prices, market premiums and discounts, and product quality. The company has limited pricing power over benchmark metal prices.
• The 2025 annual report disclosed sales of approximately RMB 37.920 billion to the top five customers, accounting for 18.35% of total annual sales; this is based on a single year’s annual-report figures, and the latest annual report should be consulted for updated data.
• At end-2025, notes and accounts receivable were RMB 1.210 billion, equal to 0.59% of revenue and 5.95% of net profit attributable to shareholders of the parent; accounts receivable turnover was 222.49x, and prepayments were RMB 1.839 billion.

The company occupies a hybrid position spanning upstream resource extraction and midstream mineral trading: the mining segment had a gross margin of 52.85%, compared with only 6.44% for trading. Margin improvement depends primarily on increasing output from high-margin mines, improving resource recovery, increasing the profit contribution from trading and controlling costs. The company is not a strong price-setter for benchmark metal prices.

2.4 Industry and Peer Comparison

The company combines multi-metal mining with mineral trading. In 2025, mining-side revenue grew and its gross margin exceeded that of the trading segment; changes in the business mix and metal prices are key drivers of profitability.

CMOC combines multi-metal mines with a trading platform. Gross margin in its mining segment exceeds the consolidated figure, while trading dilutes overall profitability. Jinduicheng Molybdenum is more focused on molybdenum; Zijin Mining is larger and has a different mix of metals; Huayou Cobalt has a greater exposure to new-energy materials.

3. Financial Quality

3.1 Operating Performance

As of the 1H 2026 report; amounts are in RMB, and 1H 2026 revenue is presented as disclosed.

In 1H 2026, growth in both net profit attributable to shareholders of the parent and adjusted net profit significantly outpaced revenue growth, with YoY growth continuing in the latest quarter. Performance was supported by rising metal prices, higher trading revenue and improved mining profitability. The trading segment has a low gross margin, while mining and processing is the main source of profit.

3.2 Financial Health Check

4. Valuation and Market Expectations

4.1 Valuation

Valuation multiples were calculated programmatically using closing data as of 2026-09-30 (trailing 12-month basis); peer multiples were calculated on the same basis using closing data as of 2026-09-30.

Market-implied expectations: At the current PE of 12.98x, if investors require an annualized return of 8% and the stock is valued at 15x earnings in 10 years, EPS would need to grow at an average annual rate of approximately 6.5% (excluding dividends; a conservative assumption). This can be compared with the institutional growth forecasts below.

PE-TTM is 12.98x, at the 16th percentile over the past 5.2 years and below the historical median of 19.18x; PB-MRQ at 4.03x and PS-TTM at 1.46x are at the 80th and 82nd percentiles, respectively, above their medians. The price implies average annual long-term EPS growth of approximately 6.5%, below institutional forecasts for growth in the coming years. Valuation is split between a low earnings multiple and high asset and revenue multiples, with the key question being whether high profitability can be sustained.

4.2 Consensus Estimates

Consensus estimates from 21 institutions over the past six months, as of 2026-10-02; 14 forecasts for 2026E net profit attributable to shareholders of the parent range from RMB 30.276 billion to RMB 34.626 billion.

4.3 Institutional Views

Three institutions cover the stock, with an average target price of RMB 24.5 and a range of RMB 21.7–28.42; the latest is RMB 23.39 from GF Securities on 2026-09-09.

5. Catalysts and Recent Events

5.1 Key Upcoming Milestones

5.2 Recent Important Events

• 2026-08-21 Revision of related-party transaction limits with CATL and KFM (Neutral): The company revised the annual caps for related-party transactions for 2026–2028, covering sales to and purchases from CATL, as well as purchases and services involving the KFM Group. The caps are transaction frameworks and do not represent actual transaction amounts; subsequent fulfillment and pricing should be monitored.
• 2026-09-19 Guarantee for the Tanzania-Zambia Railway project (Neutral): The company provided a joint and several liability guarantee of up to RMB 348.04 million for the Tanzania-Zambia Railway project, in proportion to its 5% share. The project may improve African logistics, but there is no clear commissioning date yet; the guarantee creates contingent risk.
• 2026-09-09 Ex-rights distribution of interim cash dividend completed (Positive): The company distributed a cash dividend of RMB 0.095 per share (including tax), for a total cash dividend of approximately RMB 2.032 billion. The ex-dividend date and payment date were September 9.

6. Bull-Bear Debate and Risks

6.1 Bull Case

• The company’s own mines supply 93.90% of its raw materials, helping control external procurement costs; comprehensive recovery from tailings can recover various associated minerals and increase resource utilization value.
• Copper output was 741,100 tonnes and cobalt output was 117,500 tonnes in 2025. Multiple metals provide an output base, and the mining segment is more profitable than the low-margin trading business.

6.2 Bear Case

• Institutions expect net profit growth to decline from 61.46% in 2026 to 13.38% in 2027, suggesting a possible marked slowdown after a period of high growth.
• The trading segment’s gross margin is only 6.44%, and the company has limited pricing power over benchmark metal prices; lower metal prices or changes in trading volume could weigh on profit.

6.3 Other Risks

• Country or operating disruptions in the DRC could affect mine production, logistics and costs, thereby reducing output and profit.
• The related-party transaction caps with CATL and KFM are transaction frameworks, not actual transaction amounts; if the subsequent transaction scale or pricing is unfavorable, returns from the related businesses may be affected.
• The joint and several liability guarantee of up to RMB 348.04 million for the Tanzania-Zambia Railway project could create cash flow and debt pressure if called.

7. Monitoring Checklist

8. Share Price and Short-Term Outlook (Next Week, Scenario Analysis for Reference Only)

⚠️ Risk Warning: The following is a subjective scenario analysis based on data as of 2026-09-30. The weights are heuristic judgments, not statistical probabilities, and do not constitute investment advice.

8.1 Technical Overview

The share price is below all major moving averages, down 10.99% over the past 20 trading days, and the trend is weak. The close is near the lower Bollinger Band and RSI6 is low; the key short-term question is whether support at 16.46–16.57 can hold.

8.2 Key Price Levels

8.3 One-Week Range Based on Historical Volatility

Using the 2026-09-30 price of RMB 16.88 as the reference, the closing price range for the next 5 trading days is estimated from the return distribution over the past 300 trading days (scaled to a current index-weighted daily volatility of approximately 2.3%, while retaining this stock’s own frequency of large gains and losses):

This range reflects only the stock’s recent volatility and does not indicate price direction; in the event of a major announcement or sharp market decline, actual performance may fall outside the range.

8.4 Scenarios for the Coming Week (Subjective Weights, Not Statistical Probabilities)

• Consolidation (relatively higher weight, approximately 50%): 16.46–17.33; if the lower Bollinger Band holds but the share price fails to move decisively above MA10, watch for range-bound trading. Based on historical volatility, the probability of the closing price falling within this range one week later is approximately 35%.
• Further Weakness (medium weight, approximately 30%): 11.89–16.46; if the share price breaks below 16.46 on higher volume, it may continue to seek support around the 52-week low. Based on historical volatility, the probability of the closing price falling within this range one week later is approximately 25%.
• Strengthening Rebound (relatively low weight, approximately 20%): 17.33–17.87; if trading volume increases and the share price moves above 17.33, watch for a recovery toward the MA20 and Bollinger middle-band area. Based on historical volatility, the probability of the closing price falling within this range one week later is approximately 20%.

The weights in parentheses are subjective; the probabilities at the end of each sentence are inferred from the volatility ranges above and reflect volatility only, not price direction.

8.5 Fund Flows and Liquidity

Over the past 10 trading days (2026-09-16–09-30), trading value was approximately RMB 1.312 billion–3.295 billion and turnover was 0.45%–1.08%; the latest trading value was RMB 1.311 billion and turnover was 0.45%. As of 2026-06-30, the top 10 tradable shareholders held a combined 70.36%, including public funds and insurance products; shareholder disclosures lag and the ownership structure may have changed. With a relatively low turnover rate, the ability of trading volume to absorb large transactions and potential slippage still merit attention.

A single-day trading value above RMB 3.295 billion, together with a recovery above 17.33, could be viewed as confirmation of improving price-volume momentum.

The scenario analysis above is based on closing data as of 2026-09-30 and calculations using historical prices and technical indicators. In the short term, the share price may also be affected by news, fund flows, the broader market and other factors. Technical indicators are inherently lagging and limited; they do not guarantee future performance and do not constitute a buy or sell recommendation. Please make independent judgments based on the latest market information and assume your own investment risks.

2025 Annual Report

Copper and cobalt

TFM copper-cobalt mine

One of the world’s top five copper mines

KFM copper-cobalt](https://static.cninfo.com.cn/finalpage/2026-03-28/1225047937.PDF)

• CMOC: 2025 Annual Report (Updated Version) _ Jiufang Zhitou
• CMOC (603993) Financial Indicators _ Sina Finance
• CMOC (603993) - Fundamental Research Report - Aiguuu
• Zijin Mining (601899)_Company Announcements_Zijin Mining: 2025 Annual Audit Report_Sina Finance
• Eastmoney F10 Financial Analysis
• Eastmoney F10 Earnings Forecasts
• CMOC: 2026 Interim Report
• CMOC (603993)_Company Announcements_CMOC: Preliminary Announcement of 2026 Interim Results_Sina Finance
• static.cninfo.com.cn (Announcement PDF)
• CMOC (603993)_Company Announcements_CMOC: Announcement on Signing Continuing Related-Party Transaction Agreements_Sina Finance
• CMOC (603993)_Company Announcements_CMOC: Implementation Announcement for 2026 Interim Distribution of Rights and Interests_Sina Finance
• CMOC (603993)_Company Announcements_CMOC: Announcement on Providing a Guarantee for an Associate_Sina Finance
• CMOC (603993)_Company Announcements_CMOC: Announcement on Progress in Providing a Guarantee for a Subsidiary_Sina Finance
• CMOC (603993) Lock-up Expiry Details _ Eastmoney Data Channel
• Eastmoney Individual Stock Fund Flows
• Eastmoney Shareholder Research

Sources

• 投资者关系常见问题 - 洛阳栾川钼业集团股份有限公司
• 洛阳钼业(603993)_公司公告_洛阳钼业：2025年年度报告新浪财经_新浪网
• [CMOC 洛阳钼业

This report was automatically researched, compiled and generated by AI based on publicly available information. Information is current through the 2026-09-30 close and may differ in timeliness; please refer to the company’s formal announcements and authoritative data terminals for specific figures. This report is for information collation and research reference only and does not constitute investment advice. Investors should make independent judgments and assume their own investment risks.